Packaging is an innate part of order fulfillment. Unfortunately, packages can sometimes be overpacked or oversized, causing money to be wasted on every shipment. Businesses are increasingly reassessing their packaging strategy to be sure they aren’t wasting money or sacrificing their customer experience, but where do you start?
What is package optimization?
Package optimization refers to optimizing the packaging of products for transportation or storage. This is accomplished by finding a balance between the smallest dimension and weight of a parcel while providing protection for the product stored inside. By reducing the size and weight of packages, companies can often save money on packing materials, storage, and shipping.
How to choose the right packing material
Choosing the right packing material is a critical aspect of shipping products to customers. Choosing to not have enough packing materials can result in damaged products when boxes are inevitably dropped and dinged on their way to a customer. Having too much packing material is wasteful and not cost-effective.
There are two types of packaging to consider; primary and secondary packaging.
Primary packaging is designed to optimize the customer’s experience and consists of whata consumer would see on a store shelf or on a display. Primary packaging informs the consumer about the product and gives an impression of the brand. This packaging generally does not have to be as durable as other types of packaging, as it is most often shipped inside of another package or box.
Secondary packaging is the protective packaging that is used during shipping. This type of packaging is utilitarian and is often not designed, including cushioning material, such as packing peanuts, Styrofoam, and craft paper. Secondary packaging should be selected to protect the product from environmental hazards, like temperature, humidity, vibrations, drops, and punctures that may occur during transportation (dry ice could be a part of your secondary packaging if you’re shipping ice cream).
Package optimization primarily focuses on secondary packaging, but that’s not to say that primary packaging isn’t something that should be carefully considered, too. Finding the right balance between package protection and minimizing package size and weight is the key to package optimization and an improved customer experience, along with cost savings.
The best starting point is with the customer in mind. Use some of these questions to approach identifying how packaging impacts your customer experience:
- What do my customers expect when they open a package from me?
- Is this the first time they’ve interacted with my brand or products in person?
- Is there a way for me to get feedback directly from customers?
Once you understand what your customers want, you’re ready to start working within those constraints to make your packaging as cheap as possible. At this stage the questions to ask yourself include:
- How big are my products?
- Is there leftover space in the packaging with some or all my products?
- How much am I spending on packaging per shipment?
- Are my products often damaged upon arrival to the end customer?
- How much am I spending per package on shipping?
As you have probably noticed after reading through the above questions, optimizing your packaging is a process that involves multiple departments in a company, from marketing to operations and customer service. The perfect balance between customer experience/package protection and cost-savings varies by company and product, so be sure you’re looking at the issue from every angle to inform your decisions.
The benefits of package optimization
Package optimization has numerous benefits, the most apparent of which is cost reduction. Even small reductions in package sizes can result in significant savings through the order fulfillment process by reducing the amount spent on packaging materials.
Another area of savings comes from the cost of shipping a package. All major shipping carriers use dimensional (DIM) weight to determine the cost of a shipment, which considers both the size and weight of a package. Reducing either of these factors, even by a small amount, adds up to real savings down the line.
If the products business ships are similar sizes, it can be advantageous to use the same size box. This strategy increases product density. This means more products can be stored and shipped with less wasted space because the boxes fit together in pallets, bins, or on shelves. Less wasted space equals greater efficiency.
Reduction in damaged goods
It’s no surprise that when a customer receives a damaged or broken product it can lead to a bad impression of the brand. This is why finding the right balance between product protection and optimizing package characteristics can be beneficial to shippers.
By choosing the appropriate packaging size and shape, businesses can secure the product in place within the package and prevent any movement that could result in damage. Additionally, package optimization can help businesses choose the right packaging materials for their products, ensuring that they are adequately protected against moisture, temperature fluctuations, and other external factors that could cause damage. By using materials with the appropriate strength and durability, businesses can reduce the risk of damage and ensure that the product arrives in the same condition it was in when it left the warehouse (and if you’re handling your own manufacturing, you’ll want to consider how this process relates to any packages sent from a manufacturing plant to your warehouses).
Small changes like package optimization can reduce human impact on the environment. Plastic, Styrofoam, and cardboard are commonly used in packaging but have been found to be harmful to the environment due to the excessive waste they produce and the length of time it takes to decompose. Plastic in particular is a major contributor to environmental degradation, despite being the most versatile, durable, and reliable material for primary and secondary packaging.
While it may be difficult to eliminate plastic use entirely, reducing its use in product packaging is possible. One way to achieve this is by reducing the size of the packaging, limiting the use of non-biodegradable materials, and opting for more eco-friendly products when redesigning packaging. These changes not only help minimize the carbon footprint and protect the environment but also appeal to environmentally conscious customers, boosting your brand image. Making such changes can win favor with customers who value sustainable practices.
Package optimization is a critical process that companies must undertake to reduce shipping costs, increase efficiency, and minimize environmental impact. By optimizing package dimensions, weight, and materials, companies can improve their fulfillment and customer experience. With the increasing demand for e-commerce, it is crucial that companies invest in package optimization to stay competitive in the market.
iDrive Logistics offers a holistic approach to your shipping operations, considering everything from your carrier contracts to your packaging and distribution model. If you would like to learn more about our services, contact us today! https://www.idrivelogistics.com/talk-with-an-expert